Mark F. Weiss' Blog on the Business of Healthcare

Most of us seek comfort. We want the usual. We tend to hang on too long. Like to that sweater or college T shirt. You know, the one with the frayed edges…but is that right for your future? Comment or contact me if you’d like to discuss this post. Mark F. Weiss

If I can make you a dollar by cutting your costs, can I keep 50 cents? That, in a nutshell, is what’s described as “gainsharing” in the context of arrangements between medical groups and hospitals. The physicians, as a part of a structured arrangement, are rewarded for making a hospital service more efficient or more …

Has your medical group put themselves in a position where they can be easily taken over legally and cheaply? Comment or contact me if you’d like to discuss this post. Mark F. Weiss Podcast: Play in new window | Download

More and more hospitals are disrupting their longstanding hospital-based group relationships as they seek to cut stipends and get more for nothing. The favored tool? A “weaponized” form of the request for proposal. There are three main types, which ones are you prepared to encounter? Comment or contact me if you’d like to discuss this …

No, not a Da Vinci, but a robot just the same. And, fully functional. Well, at least enough to have co-starred in the 1950’s sci-fi film, Forbidden Planet, a movie about medical groups and their physician leaders.

Well, okay, if you’ve seen the movie, you’ve caught me.

On the surface, the film, set in the 23rd century, is about the crew of a spaceship, commanded by John J. Adams, sent from Earth to the planet Altair IV to investigate what happened to a lost expedition. Robby is one of the co-stars, but the monster in the movie and, specifically, its creation, is what stole the show. It’s what provides the central message for physicians and medical group leaders.

In the movie, the only humans Adams and his crew find alive are a scientist, Dr. Morbius, and his daughter, Altaira. They learn from Dr. Morbius that some mysterious force killed the rest of the original crew. Only he and his wife, who subsequently died of natural causes, survived. Altaira was born on the planet.

Over his 20 years on Altair IV, Dr. Morbius discovered the incredible technology left by the Krell, a dead race, including the “plastic educator” that enhances the intellect.

Adams wants to take the Krell technology back to Earth, but Morbius strenuously objects because humanity is not yet ready to receive such limitless power.

Then, a monster appears, immune to all weapons and defenses. It kills several of Adams’ crew.

Cutting to the chase (and major spoiler alert) we learn that the Krell’s technology would materialize anything that they could imagine. The weakness in the design was that that included materializing their darkest thoughts, their “monsters from the Id.” Just as the Krell’s mental monsters had materialized to wipe out the Krell, the mysterious forces that killed Morbius’ crew and the monster that attacked Adams’ men were creatures of Morbius’ own subconscious mind.

And, that’s the message: We often mentally create roadblocks and boogeymen big and small (e.g., the “competition,” “that’s the way it’s done,” “the hospital controls us”) and throw them up in front of us as if they were real, when the truth is that they’re simply self-created, imagined limitations.

Dr. Morbius died on the planet Altair IV, a victim of his own monster. Don’t let his thinking limit your future.

Slide after slide flashed on the screen, each looking even more like a dish of spaghetti topped with Froot Loops and Cheez-Its than the one before it.

This entity and that. Physicians here. Investors there. Money flowing this way. Control over here and ownership over there.

From a purely legal standpoint, the models made sense.

However, from the practical standpoint, one apparently lost on the presenter, the structures were unfinanceable.

And, even assuming that the owners could finance the deals completely out of pocket, the structures would likely cause payors either to balk at paying you in the first place, or worse, to pay you now but later wake up to what’s really going on. Then, they’d demand their money back and claim that you defrauded them, or worse.

This is an example of the necessity of second order thinking.

The first order in our example is simply to ask whether the structure works from a legal standpoint. (“Yes, it does, so let’s proceed to document it.”)

The second order is consideration of the impact of your decision made at the initial level. (“Can we finance that type of deal?” “Is the legal structure ‘too cute by half?'”)

The dive goes deeper from there, to the third level (e.g., “What’s the impact of an unfinanceable structure on our relationship with . . . “”) and beyond, bounded only by the time and money you’re willing to invest in the process and the question of whether it makes sense to do so.

Ride along with Mark as he discusses the fact that trends, even those that seem modern, such as home delivery of fully prepared meals, are simply history repeating itself or, at least, rhyming. Understanding this facilitates your exploitation of trends in healthcare.

In a Wall Street Journal piece published in last weekend’s Saturday/Sunday Nov. 11-12, 2017, edition, Ezekial Emanuel, M.D. of the University of Pennsylvania and other pursuits, wrote of the “hype of virtual medicine.”

In particular, he cited studies that show that virtual medicine and high-tech health gadgets such as Fitbits accomplish nothing in regard to increasing patient compliance with doctors’ orders or to actually live healthier lifestyles. The same compliance problems that exist with regard to traditional medical encounters exist with regard to technological encounters.

The bigger issue is why he’s surprised at all.

People are free to do with their health what they want to do, and the simple fact of the matter is that many people don’t feel like complying with physicians’ “orders” any more than many physicians feel like complying with “compliance” laws.

It’s simply a fact of free choice.

Just as I wasn’t surprised when, several years ago, a corpulent physician suggested that I eat a second lunch in the physician’s dining room at the hospital “because the food is free,” I’m not that surprised when a group of hospital administrators thinks that an obviously defective and illegal kickback scheme is a perfectly valid business model.

Free choice in structuring healthcare deals, just as free choice in having that fifth doughnut, falls on a risk-reward-punishment continuum.

What’s Sally’s (the wife and mother) health risk when faced with the question of second glazed or fourth jelly? What’s Sally’s (now at her desk as hospital CEO) risk when faced with the question of entering into an undocumented financial arrangement with a referring physician, thus implicating Stark and the Anti-Kickback Statute? What’s Sally’s sister Sarah’s risk when faced with the question of entering her medical group into a deal with pharmacy owners and investors to telephonically prescribe pain creams to patients on a one-off, transactional basis?

Pleasure/money now, with some risk of diabetes/debarrment/detainment far off in the future. Or, maybe not so far off.

The issue of risk isn’t just the cold calculation of the chance of getting caught. It’s that chance times the intensity of the punishment. A 5% chance of 10 years in prison is riskier than a 60% chance of a $50,000 civil monetary penalty and being forced into a Corporate Integrity Agreement.

Of course, the scale that we use to measure risk isn’t fixed either, and some put an extra finger or even two on the side of the scale marked “it won’t happen to me.” But, then again, we’re also free to fool ourselves.

How else can you explain deals gone awry such as these:

Sweet Dreams Nurse Anesthesia agreed to pay $1,034,416 to the U.S. government and $12,078.79 to the the State of Georgia to resolve allegations that it violated (due to underling AKS violations) the False Claims Act and the Georgia False Medicaid Claims Act.

Specifically, they were alleged to have entered into arrangements with ASCs to provide the facilities with free anesthesia drugs in exchange for exclusive anesthesia agreements. They were also alleged to have agreed, through an affiliate, to fund the construction of an ASC in exchange for contracts as the exclusive anesthesia provider at that and a number of other ASCs.

MediSys Health Network Inc., the owner of Jamaica Hospital Medical Center and Flushing Hospital and Medical Center, both in Queens, New York, agreed to pay $4 million to the U.S. government to settle allegations that it violated (due to underlying Stark Law violations) the False Claims Act by engaging in improper ﬁnancial relationships with referring physicians.

Specifically they were alleged to have have submitted false claims to the Medicare program for services rendered to patients referred by physicians with whom the defendants had improper compensation and ofﬁce lease arrangements.

So, strap on that Fitbit and have the glazed, or give free drugs to the ASC, or provide free office space to the cardiac surgery group.

Hey, it’s a free country. Just remember that you’re free to suffer the consequences, too.

COMPLIMENTARY BOOK DOWNLOAD

Success. Even more success. It’s what you want. Welcome to the club, which appears to be getting more exclusive every day, not due to evolution but to self-selection. Of course, sometimes we get stuck, or at least delayed, by the problems that pop up, blocking the way. But for many, the problem is that they don’t know what the problem is. I’ve been working with medical group leaders with the aim of increasing their group’s profits and managing their risk of loss for over 30 years. Does that mean that I have all of the answers? No. But what I do have is a point of view, a way of thinking about your success. So go ahead and start reading now. No one is going to do it for you. Which, by the way, is thinking tool number one.
The Success Prescription: Thinking Tools For Medical Group LeadersAmazon or you can download a complimentary PDF version here.

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Having fallen for the fallacy that there’s profit in market share, hospitals have gorged on acquisitions and on employment and alignment of physicians. Many physicians have been willing participants through practice sales and in the belief that there’s safety in hospital employment. But it’s becoming evident that physician employment leads to losses and that integrated care delivers neither better care nor lower costs. And now, technology is about to moot many of the reasons for a hospital’s existence. How can your practice survive and even thrive in the post-hospital world?
The Impending Death of Hospitals is available for purchase in hard copy or in Kindle format on Amazon or you can download a complimentary PDF version here.

COMPLIMENTARY BOOK DOWNLOAD

Today’s medical groups must confront multiple challenges: The impact of Obamacare. Increasing commoditization. More competition, not just from other physicians and medical professionals, but also from hospitals, investor-owned groups, and disruptive ventures. Yet at the same time, the future of healthcare offers medical groups tremendous opportunity.

This small book is a collection of essays, of thoughts as thinking tools for your success. Read. Think. Succeed. Repeat.

Success Or Failure? Strategic Tools For Medical Group Leaders is available for purchase in hard copy or in Kindle format on Amazon or you can download a complimentary PDF version here.

COMPLIMENTARY BOOK DOWNLOAD

Some days, it seems as if everyone, from anesthesia groups to vascular surgery practices, is talking about selling their practice to a larger group, to private equity investors, or to a hospital.

The reality is that some practices can be sold, some can never be sold, and some have nothing to sell.

The reality also is that there are a number of strategic alternatives to a practice sale.

A perfect storm of factors is accelerating the market for hospital-based medical group mergers and acquisitions.

Mergers is available for purchase in hard copy or in Kindle format on Amazon or you can download a complimentary PDF version here.

COMPLIMENTARY BOOK DOWNLOAD

The healthcare market is changing rapidly, bringing new sets of problems.

How can you find a solution, how can you engage in the right development of strategy, and how can you to plan your, or your group’s, future without tools to help clarify your thinking?

Directions is available for purchase in hard copy or in Kindle format on Amazon or you can download a complimentary PFD version here.